Insights from inside the Paris climate negotiations

Remaining challenges at COP21 and implications for business

Carbon Markets and Renewable Energy Update

As the government teams at COP21 in Paris go into overdrive, the temperature is beginning to rise in the negotiations and while all hopes are firmly set on a successful outcome, there is a considerable way to go on a number of key fronts.

As it can be difficult to sift through the press reports flowing from Paris, this update intends to reflect the mood and thinking inside the negotiation room on key issues.

On Saturday evening, the Negotiating Text was formally passed from the "ADP" to the Conference of the Parties (COP21) which is presided over by the French Environment Minister, Laurent Fabius. What this transfer means practically is that the Negotiating Text is now being negotiated between high level delegates and country ministers, to try and resolve the main impasses faced by the negotiators during the first week.

On Wednesday afternoon (Paris time), we saw another revised version of draft treaty text released. While there is consensus around some critical issues, such as the submission of country contributions, a five year "ratchet"/review mechanism and the inclusion of a "no backsliding" principle in relation to submitted country contributions (see our earlier article here), there are a number of key provisions which remain not only a challenge, but a potential roadblock, to a final agreement. These include:

Long term goals: the inclusion of a "Long Term Goal" (LTG). There are currently two forms of a LTG being negotiated under the "Purpose" and "Mitigation" articles - a quantitative goal and a qualitative goal.

The quantitative LTG revolves around the debate on a temperature goal and whether 1.5 and/or 2 degrees would be cited, and if cited, to what extent they will be aspired to.

A qualitative LTG is also being heavily negotiated. This includes divisions over concepts such as "net zero emissions", "decarbonisation" and "carbon neutrality" and whether these are to be aspired to within a certain timeframe.

It is also uncertain whether both forms of the LTG will be references within a final text at all.

The article on finance is another highly contentious issue, but there is consensus that an agreed package on finance is critical to a successful agreement. This is probably the most unsettled provision. Concepts currently in discussion as part of a package on finance include public finance from developed to developing countries, "south-south" collaboration on finance (most likely on a voluntary basis), overall scaling up of financing beyond public financing alone, financial support before 2020, innovation and provisions of support and the implementation of these concepts.

Differentiation is another key concept which has become much fought for during the course of the negotiations. Developing countries are arguing for the continued inclusion of "common but differentiated responsibilities" throughout the text. This concept derives as legacy from the United Nations Framework Convention on Climate Change and has been included in draft form throughout various parts of the text, drawing a line between developed and developing countries and what they may be required to do or comply with under a new agreement.

Of course, the negotiations are not just limited to these issues, but certainly their resolution must be achieved this week if an agreement in any workable or meaningful form is to be reached.

Our analysis is based on DLA Piper's unique insights from direct involvement within the COP21 negotiations. We currently have a few separate teams advising within the negotiations (all acting pro bono) for several countries, a coalitions of countries as well as for several prominent and respected business interest groups.

Our team's work with business interest groups, including Business for Social Responsibility and the We Mean Business Coalition, over the last few months has led to the production of a report, The Business Brief which has been heavily embraced by the business community and negotiators at COP21. This brief includes proposed text to be included which would drive business towards low-carbon and carbon-neutral investments.

While it is encouraging that a significant portion of the suggested text remains in play within the most recent draft, there will undoubtedly be significant movement and horse-trading over the remainder of the week.

Despite the final outcome from the COP21 negotiations, including any agreement which could be criticised for lack of ambition or penalties, the most important outcome is likely to be the INDCs which have been submitted by almost all countries; some are more ambitious than others. We continue to feel strongly that the synergies between the public and private sector in a uniform and sensible manner are inevitable, and that a Paris Agreement (including all of the submitted INDCs) has a crucial role to play in unleashing the next wave of private sector investment to help accelerate the achievement of climate goals.

The aim is to conclude talks and have a final treaty by Friday, although most have flights booked after Sunday. To the leaders and negotiation teams we say, bon courage, or depending on your preference, may the force be with you!

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DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific, positioning us to help clients with their legal needs around the world.

DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific, positioning us to help clients with their legal needs around the world.